Intel, Sharp to Develop ‘Flash Memory’ Chips

Intel, the leading U.S. computer chip company, has agreed to work with Japanese electronics giant Sharp Corp. in the development of an increasingly popular information storage device known as flash memory.

The decision to hook up with a Japanese firm could prove controversial for Intel, whose chief executive, Andrew S. Grove, has advocated restrictions on Japanese investments in American high-tech companies and other measures to protect the U.S. electronics industry.

But the deal is hardly the first involving U.S. and Japanese electronics companies, and many expect such linkages to become common as the cost of developing leading-edge products continues to climb.

Flash memories are tiny computer chips that can store electronic information even when power is switched off. They serve the same purpose as the disk drives used on most computers, but they are smaller, lighter and use less power.

Though they remain far more expensive than disk drives, flash memories are expected to become the standard storage device for ever-shrinking portable computers and an emerging generation of sophisticated consumer electronics products ranging from game machines to tapeless recording devices to electronic organizers.

Intel and Sharp declined to disclose financial details of their agreement. They will work together to develop next-generation flash memories that will be built with the most advanced chip-production technologies.

Production will begin at a Sharp facility in Fukuyama in 1994. Intel said the new products will likely be built at Intel facilities in the United States as well.

Intel holds 85% of the $130-million flash memory market, according to the market research firm Dataquest. Sales of the devices are expected to leap to $1.5 billion by 1995.

Intel said it needed a partner to maintain its edge in a rapidly growing market.